UK house prices posted their first annual decline since November 2023 in August, according to the Lloyds House Price Index. Values fell 0.4% year-on-year, a slide that followed a 0.2% month-on-month drop in August after a 0.1% decline in July. The average UK home now costs £298,468, down from £299,153 a month earlier — though still marginally up 0.2% since the start of the year.
Andrew Asaam, mortgages director at Lloyds, attributed the softening to a “more difficult backdrop in recent months,” pointing to the impact of global events on inflation and borrowing costs. He said sellers are largely holding firm on price rather than cutting aggressively, while some buyers are waiting to see how conditions develop — a standoff that has pushed transaction volumes to their lowest level since early 2024. Asaam noted average prices remain around 25% higher than at the end of 2019, despite the recent pullback.
The picture is sharply regional. Northern Ireland recorded the strongest annual growth at 6.9%, taking its average property value to a record £231,245, followed by Scotland (+3.5% to £223,437) and continued gains across northern England, including the North East (+2.7%) and North West (+2.0%). Southern England told the opposite story: the South East posted the steepest annual fall (-1.6% to £381,729), followed by Greater London (-1.5% to £534,177) and the South West and Eastern England (both -1.2%).
The Lloyds reading contrasts with Nationwide’s separate August index, published a week earlier, which showed UK annual house price growth edging up to 1.6% — a reminder that the UK’s two main mortgage-lender indices are currently telling different stories about the same market.
Asaam said Lloyds expects the market “to remain fairly subdued in the months ahead,” but for this to have only a “limited impact” on prices, since wage growth and resilient employment continue to support demand. Anthony Codling, managing director of equity research at RBC Capital Markets, pointed to swap rates spiking to three-year highs in early September as a further near-term headwind. Ian Futcher, a financial planner at Quilter, said attention will now turn to the Bank of England’s next rate decision on 17 September, with markets watching for clues on the future path of interest rates.
References
Property Industry Eye – House prices record first annual fall since 2023 / Express and Star – Average UK house price falls annually for first time since 2023 – Lloyds
